WASHINGTON - The Justice Department announced today that it has sued a federal
income tax preparer in U.S. District Court in Miami seeking to bar her from
preparing tax returns for others. According to the government’s civil
injunction complaint, Tashanna McFarland of Miramar, Fla., prepared federal tax
returns claiming fraudulent fuel tax credits, a scam that the complaint explains
is a serious enforcement problem for the Internal Revenue Service (IRS). The
suit alleges that McFarland operates her tax preparation business out of a
booth at a flea market in Miami.

Federal law imposes a fuel tax on gasoline and diesel fuel sold in the United
States. The tax is included in the purchase price at the pump. Businesses can
claim a fuel tax credit in certain rare circumstances, but most businesses and
consumers who use cars or trucks on roads and highways are not eligible for the
credit. According to the government’s complaint, McFarland claimed the fuel
credit on her customers’ returns so they could claim tax refunds to which they
were not entitled.

The complaint says that on a return for one customer—a babysitter—McFarland
claimed that the customer purchased 16,451 gallons of gasoline for
business-related purposes. The suit notes that for such a claim to be
accurate, the babysitter (whose total income for the year was $9,316) would
have had to spend approximately $36,192 for gasoline that year—nearly four
times her total income—and would had to have driven approximately 246,765 miles
during the year, an average of 676 miles each day, seven days a week.

The government complaint alleges that McFarland has prepared at least 970
returns since 2003 and the IRS has identified over $1.5 million dollars in
fraudulent fuel tax credits on McFarland-prepared returns.
“People who have their returns prepared by others should review them carefully
to make sure they are truthful,” said Eileen J. O’Connor, Assistant Attorney
General for the Justice Department’s Tax Division. “The preparer who seems to
be saving you taxes now is setting you up for trouble later, when the IRS
realizes that you filed a false return and obtained a larger refund, or paid
less in taxes, than you should have.”

“This problem is primarily being caused by unscrupulous tax return preparers
located across the country," said Kathy Petronchak, Commissioner of the IRS
Small Business / Self Employed Division. "The IRS is working closely with the
Department of Justice to stop this behavior."

Since 2001, the Justice Department’s Tax Division has obtained more than 215
injunctions to stop the promotion of tax fraud schemes and the preparation of
fraudulent returns. Information about these cases is available on the Justice
Department Web site at http://www.usdoj.gov/tax/taxpress2006.htm. More
information about the Justice Department’s Tax Division can be found at
http://www.usdoj.gov/tax.